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1. You must have held an interest in the

rollover. To qualify for the section 1045

the distributed replacement QSB stock. If the

partnership when the partnership acquired

rollover:

partnership distributed your share of

the QSB stock and at all times thereafter until

replacement QSB stock to another partner,

1. You must have held an interest in the

the partnership disposed of the QSB stock.

the partnership should give you (a) the name

partnership during the entire period in which

of the corporation that issued the

2. Your share of the eligible section

the partnership held the QSB stock,

replacement QSB stock, (b) the date the

1202 gain cannot exceed the amount that

2. Your share of the gain eligible for the

replacement QSB stock was distributed to

would have been allocated to you based on

section 1045 rollover cannot exceed the

another partner or partners, and (c) your

your interest in the partnership at the time the

amount that would have been allocated to

share of the partnership's adjusted basis and

QSB stock was acquired.

you based on your interest in the partnership

fair market value of the replacement QSB

at the time the QSB stock was acquired, and

See the Instructions for Schedule D

stock on such date.

(Form 1040) and the Instructions for Form

3. You must purchase other QSB stock

For more information, see Regulations

8949 for details on how to report the gain

(as defined in the Instructions for Schedule D

section 1.1045-1.

and the amount of the allowable exclusion.

(Form 1040)) during the 60-day period that

Gain eligible for section 1045 rollover.

began on the date the QSB stock was sold

Deductions

by the partnership.

Replacement stock purchased by the

See the Instructions for Schedule D

Box 12. Section 179 Deduction

partnership. The partnership should give

(Form 1040) and the Instructions for Form

you (a) the name of the corporation that

Use this amount, along with the total cost of

8949 for details on how to report the gain

issued the qualified small business (QSB)

section 179 property placed in service during

and the amount of the allowable postponed

stock, (b) your share of the partnership's

the year from other sources, to complete Part

gain.

adjusted basis and sales price of the QSB

I of Form 4562, Depreciation and

stock, (c) the dates the QSB stock was

Making the section 1045 election.

Amortization. The partnership will report on

bought and sold, (d) your share of gain from

You make a section 1045 election on a

an attached statement your allowable share

the sale of the QSB stock, and (e) your

timely filed return for the tax year during

of the cost of any qualified enterprise zone or

share of the gain that was deferred by the

which the partnership's tax year ends. See

qualified real property it placed in service

partnership under section 1045. Corporate

the Instructions for Form 8949 and the

during the tax year. Report the amount from

partners are not eligible for the section 1045

Instructions for Schedule D (Form 1040) for

line 12 of Form 4562 allocable to a passive

rollover. To qualify for the section 1045

more information. Attach to your Schedule D

activity using the Instructions for Form 8582.

rollover:

(Form 1040) a statement that includes the

If the amount isn't a passive activity

following information for each amount of gain

1. You must have held an interest in the

deduction, report it on Schedule E (Form

that you do not recognize under section

partnership during the entire period in which

1040), line 28, column (i). However, if the

1045.

the partnership held the QSB stock (more

box in item D is checked, report this amount

The name of the corporation that issued

than 6 months prior to the sale), and

following the rules for Publicly traded

the QSB stock.

partnerships, earlier.

2. Your share of the gain eligible for the

The name and EIN of the selling

section 1045 rollover cannot exceed the

Box 13. Other Deductions

partnership.

amount that would have been allocated to

The dates the QSB stock was purchased

you based on your interest in the partnership

Contributions. Codes A through G. The

and sold.

at the time the QSB stock was acquired.

partnership will give you a statement that

The amount of gain that isn't recognized

shows charitable contributions subject to the

See the Instructions for Schedule D

under section 1045.

100%, 50%, 30%, and 20% adjusted gross

(Form 1040) and the Instructions for Form

If a partner purchases QSB stock, the

income limitations. For more details, see

8949 for details on how to report the gain

name of the corporation that issued the

Pub. 526, Charitable Contributions, and the

and the amount of the allowable postponed

replacement QSB stock, the date the stock

Instructions for Schedule A (Form 1040). If

gain.

was purchased, and the cost of the stock.

your contributions are subject to more than

If a partner treats the partner's interest in

one of the AGI limitations, see Worksheet 2.

Opting out of partnership election. You

QSB stock that is purchased by a purchasing

Applying the Deduction Limits in Pub. 526.

can opt out of the partnership's section 1045

partnership as the partner's replacement

Charitable contribution deductions are

election and either (1) recognize the gain or

QSB stock, the name and EIN of the

not taken into account in figuring your

(2) elect to purchase different replacement

purchasing partnership, the name of the

passive activity loss for the year. Do not

QSB stock, either directly or through

corporation that issued the replacement QSB

include them on Form 8582.

ownership of a different partnership that

stock, the partner's share of the cost of the

acquired replacement QSB stock. You

QSB stock that was purchased by the

Code A. Cash contributions (50%).

satisfy the requirement to purchase

partnership, the computation of the partner's

Report this amount, subject to the 50% AGI

replacement QSB stock if you own an

adjustment to basis with respect to that QSB

limitation, on line 16 of Schedule A (Form

interest in a partnership that purchases QSB

stock, and the date the stock was purchased

1040).

stock during the 60-day period. You also

by the partnership.

Code B. Cash contributions (30%).

must notify the partnership, in writing, if you

Report this amount, subject to the 30% AGI

opt out of the partnership's section 1045

Distribution of replacement qualified

limitation, on line 16 of Schedule A (Form

election. If you recognize gain, you must

small business (QSB) stock to a partner

1040).

notify the partnership, in writing, of the

that reduces another partner's interest in

amount of the gain that you are recognizing.

replacement QSB stock. You must

Code C. Noncash contributions (50%). If

recognize gain upon a distribution of

property other than cash is contributed, and

Replacement stock not purchased by the

replacement QSB stock to another partner

if the claimed deduction for one item or

partnership. The partnership should give

that reduces your share of the replacement

group of similar items of property exceeds

you (a) the name of the corporation that

QSB stock held by a partnership. The

$5,000, the partnership must give you a copy

issued the qualified small business (QSB)

amount of gain that you must recognize is

of Form 8283, Noncash Charitable

stock, (b) your share of the partnership's

based on the amount of gain that you would

Contributions, to attach to your tax return. Do

adjusted basis and sales price of the QSB

recognize upon a sale of the distributed

not deduct the amount shown on Form 8283.

stock, (c) the dates the QSB stock was

replacement QSB stock for its fair market

It is the partnership's contribution. Instead,

bought and sold, and (d) your share of gain

value on the date of the distribution, but not

deduct the amount identified by code C,

from the sale of the QSB stock. Corporate

to exceed the amount you previously

box 13, subject to the 50% AGI limitation, on

partners are not eligible for the section 1045

deferred under section 1045 with respect to

line 17 of Schedule A (Form 1040).

Partner's Instructions for Schedule K-1 (Form 1065)

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Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2016 Page 9

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